Reed's, Inc. Reports Record Revenues for Second Quarter 2010

LOS ANGELES, CA–(Marketwire – August 11, 2010) – Reed’s, Inc. (NASDAQ: REED) (OTCBB: REEDP), maker of the top-selling sodas in natural food stores nationwide, today issued selected second quarter 2010 financial highlights following its second quarter earnings conference call held on August 10, 2010. For those who were unable to participate in the call, a replay is now available at: http://www.reedsinc.com/investor-relations/.

Second Quarter 2010 Financial Highlights:

Second quarter sales increased 16% to a record $4.9 million. Fiscal six month 2010 sales were 17% ahead of 2009. Branded product sales represented approximately 75% of the overall sales increases.

Gross profit was 24% of sales during the quarter and 25% for the six month period, as compared to 26% in 2009.

Operating expenses decreased during both the second quarter and six month periods in 2010 as compared to 2009.

EBITDA income for the second quarter 2010 was $209,000, as compared to a loss of $488,000 in the second quarter of 2009. For the six month period, EBITDA income was $414,000, as compared to a loss of $483,000 in the prior year period.

Net loss for the quarter narrowed sharply to $164,000, compared to net loss of $873,000 during 2009.

Working capital increased by approximately $370,000 during the quarter to $2.4 million.

Cash was $1.1 million at June 30, 2010, as compared to $1.3 million at December 31, 2009. Additionally, there was $206,000 available on the revolving line of credit at June 30, 2010.

“We achieved record revenues of nearly $5 million in the second quarter, driven primarily by sales of our branded products, which all continue to outpace what we saw last year,” said Chris Reed, Founder, Chairman and CEO of Reed’s, Inc. “We expect sales of our branded product sales to be strong for the second half of the year, and anticipate realizing meaningful revenue contribution from our private label business, which has been opening new doors and helping us develop closer relationships with our customers.” Added Mr. Reed, “Operationally, Reed’s is lean and nimble and has held its costs low. With over $1 million in cash on our balance sheet and an expanding line of exciting new products, we have the talent and wherewithal to execute our vision and grow Reed’s significantly.”

About Reed’s, Inc.

Reed’s, Inc. makes the top selling natural sodas in the natural foods industry sold in over 10,500 natural food markets and supermarkets nationwide. In 2009, Reed’s started producing Private Label natural beverages for select national chains. Its six award-winning non-alcoholic Ginger Brews are unique in the beverage industry, being brewed, not manufactured and using fresh ginger, spices and fruits in a brewing process that predates commercial soft drinks. The Company owns the top selling root beer line in natural foods, the Virgil’s Root Beer product line, and the top selling cola line in natural foods, the China Cola product line. Recently, Reed’s introduced its Reed’s All Natural Ginger Nausea Relief product for the over-the-counter stomach aisle for all retail channels and acquired the Sonoma Sparkler brand, a sparkling juice celebration drink with an established customer base. Other product lines include: Reed’s Ginger Candies and Reed’s Ginger Ice Creams.

Reed’s products are sold through specialty gourmet and natural food stores, mainstream supermarket chains, retail stores and restaurants nationwide, and in Canada, as well as through private label relationships with major supermarket chains. For more information about Reed’s, please visit the company’s website at: http://www.reedsgingerbrew.com or call 800-99-REEDS.

Some portions of this press release, particularly those describing Reed’s goals and strategies, contain “forward-looking statements.” These forward-looking statements can generally be identified as such because the context of the statement will include words, such as “expects,” “should,” “believes,” “anticipates” or words of similar import. Similarly, statements that describe future plans, objectives or goals are also forward-looking statements. While Reed’s is working to achieve those goals and strategies, actual results could differ materially from those projected in the forward-looking statements as a result of a number of risks and uncertainties. These risks and uncertainties include difficulty in marketing its products and services, maintaining and protecting brand recognition, the need for significant capital, dependence on third party distributors, dependence on third party brewers, increasing costs of fuel and freight, protection of intellectual property, competition and other factors, any of which could have an adverse effect on the business plans of Reed’s, its reputation in the industry or its expected financial return from operations and results of operations. In light of significant risks and uncertainties inherent in forward-looking statements included herein, the inclusion of such statements should not be regarded as a representation by Reed’s that they will achieve such forward-looking statements. For further details and a discussion of these and other risks and uncertainties, please see our most recent reports on Form 10-KSB and Form 10-Q, as filed with the Securities and Exchange Commission, as they may be amended from time to time. Reed’s undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise.